Debate on property law begins

via CAAI News Media

Friday, 02 April 2010 15:01 Chun Sophal and Vong Sokheng

CPP and SRP clash over total area of economic concessions

THE National Assembly began debating a long-awaited draft law on foreign property ownership Thursday, sparking a dispute between the government and the main opposition Sam Rainsy Party over the exact extent of land concessions already awarded in the Kingdom.

SRP Lawmaker Son Chhay accused the government of approving 2.3 million hectares of economic concessions in the country, more than double the official 950,000 hectares reported by the Cambodian People’s Party.

“The majority of the population lacks land for farming and the legal documents of property ownership,” Son Chhay told the National Assembly, adding that at least 60 percent of Cambodia’s landowners do not have the necessary legal documentation to fight land grabs.

“The government should pay more attention to ensure land titles and rights ownership … for Cambodian people before it focuses on foreign property ownership,” he said.

Earlier in the session, Im Chhun Lim, minister of land management, told lawmakers the government had awarded just 950,000 hectares of economic concessions, 300,000 of which had been withdrawn due to company inactivity.

On January 4, the government announced it had cancelled the concessions of 50 private companies in Mondulkiri province covering 260,000 hectares after the projects concerned failed to get off the ground. Most had been approved for agricultural development including rubber and coffee plantations.

According to the figures given in Thursday’s debate, the SRP therefore claims the government has underreported land concessions by some 1.65 million hectares, with neither side accounting for the huge discrepancy.

Im Chhum Lim said the government planned to pass the draft law on foreign ownership – which would allow private possession of apartments above the ground floor – in a bid to boost the economy. The economic crisis that first hit Cambodia in the last quarter of 2008 decimated the property sector in particular as developers stalled or cancelled projects and private property transactions all but dried up.

“The draft law is aimed at attracting foreign investment and facilitating the opening up of the real estate market to allow real estate to rise in price for the restoration of the economy,” Im Chhun Lim told the National Assembly on Thursday. “The government’s target is to boost foreign investment … especially the development of special economic zones.”

Under the new law, property purchases by foreign firms or private investors would not be permitted within 30 kilometres of an international border, except within an SEZ, a number of which lie close to Cambodia’s border with Vietnam.

The SRP has accused the government of lacking transparency in awarding concessions, saying that many were the result of land speculation.

Real estate agents say such activity has slowed significantly since the economic crisis hit the sector as demand – and therefore price escalation – stalled.

The government argued Thursday that the new law would strengthen regulation of the property sector while benefiting the domestic economy.

I hope that the real estate market will boom after the National Assembly passes the law and will strengthen the state of law … for foreign investors,” said Cheam Yeap, a senior CPP lawmaker.

Real estate agents have backed the long-awaited legislation, particularly since the onset of the crisis, as the sector waits for a recovery. Sung Bonna, president of Bonna Realty Group, told the Post on Thursday that the new law would help generate confidence among foreign investors.

“This law will restore the real estate sector following the current crisis and bring an increase in economic growth,” he said.

The draft 24-article law aims to regulate increased foreign participation in the sector and contains articles similar to those used in Thailand, such as a requirement that apartment and condominiums restrict foreign ownership to 49 percent of the building.

After the Council of Ministers approved the draft in December in a meeting chaired by Prime Minister Hun Sen the law was then submitted to the National Assembly – the last stage following a lengthy drafting process – as an “urgent” measure for approval, Cheam Yeap said at the time.